Since the beginning of recorded history, land has been a significant repository of value and wealth. Many investors are looking at Montana ranches for sale as they offer a way to diversify portfolios under today’s market conditions. Additionally, the fundamental concept of supply and demand can make farm and ranch land a more attractive proposition over the next few years. The sections below list some of the reasons investors are seriously considering ranches and farms.
It Provides High Security and Low Risk
After a lengthy period of high performance during an up market, many investors are now focusing on preservation of capital during times of turmoil. An investment in ranches for sale in Montana is backed by an ironclad asset that’s in limited supply and unlikely to depreciate. Historical data proves that farmland has strong capital preservation characteristics, unlike other finite resources such as oil, gas, and mining. Properly managed farms and ranches are a renewable resource that remains perpetually productive.
Farmland is an Effective Hedge Against Inflation
Farmland has been shown to positively correlate with inflation. Historically, values increase faster than the level of inflation, which makes Montana farms for sale an effective hedge. This is particularly appealing to investors concerned about the government’s fiscal policies on the monetization of debt.
Farmland Delivers a High ROI
Investment in Montana cattle ranches for sale can capture capital and operating returns through a combo of asset appreciation and rental income. Returns on farmland repeatedly outperform other assets such as bonds, stocks, and commercial properties across multiple timescales and markets, despite their relatively low risk level.
Investment is Transparent and Easy
In a climate of accounting irregularities, corporate fraud, bankruptcy, and greed, the ease of ownership of real estate is appealing to a significant number of buyers.
Farm and Ranch Land Has Tremendous Benefits Over Other Investment Types
Although Montana hunting ranches for sale fall under the real estate classification, they have unique characteristics that protect the land from steep declines in value as seen in residential and commercial properties.
- Supply limits: Unlike other real estate types where supply can be increased with new building, the supply of ranch and farmland is fixed.
- Rising, resilient demand: Food demand is not related to price because people must eat no matter the cost. Food costs are an area where the wealth of consumers in emerging markets is captured.
- Earnings/price and yield: As a rule, the value of agricultural land is supported by earnings arising from the asset.
- Farm debt: Asset/debt ratios remain low in this sector as compared to other classes of real estate.
Owning a farm or ranch in Montana carries specific advantages, some of which are not listed here. By learning about the benefits and risks of landownership, buyers can make an informed purchase decision.